Halloween may be right around the corner, but there’s a different seasonal source of fear keeping marketers up at night: next year’s budget. Yes, it’s that time of year again. Across industries, organizations of all sizes are determining how to allocate their marketing resources to achieve the best possible return on investment.
Whether you operate in the B2C, B2B, or nonprofit sector—and unless you’re clairvoyant—you’re here to find the answer to one question: “What channels and resources do I prioritize to achieve next year’s marketing goals?” I wish I could skip ahead and give you all the answers but, alas, those of us at Daylight aren’t clairvoyant either. Yet.
Until we do develop extrasensory perception, I’d like to share some advice on what to consider when putting together a digital marketing strategy and budget plan for your company. Use this outline to get started:
General Factors to Consider
1. How much to budget
Although budgets vary substantially throughout organizations and industries, research by eMarketer and Forrester Research indicates that companies will likely spend between 30–45% of their overall marketing budget on digital marketing in 2018. Considering that a typical marketing budget can range between 1–20% of sales revenue, it’s probably safe to estimate that you’ll spend 5–9% of your revenue on digital marketing—but, again, it depends entirely on your company’s unique circumstances.
2. What level of uncertainty you’re willing to accept
Just a few years ago, most of us knew nothing about Snapchat, let alone imagined it as a viable marketing channel. Now, brands are all over the platform—sharing stories, building anticipation for events, sponsoring content, adorning Bitmoji, and so on. Don’t lose your opportunity to plan for the possible emergence of the next Snapchat. If early adoption of marketing technology is important to your brand, carve out a portion of your budget to invest in new platforms.
3. What channels and touchpoints really matter to your brand
Digital marketing encompasses a vast and diverse set of activities and initiatives. It could include search engine optimization (SEO) and search engine marketing (SEM), content marketing, social media, email, pay-per-click advertising, affiliate and influencer marketing, paid search, and much more—and it frequently involves processes such as web and app design, data analytics and conversion tracking, and automation.
Don’t assume that you should—or can—manage everything. Unless you have unlimited resources, you’ll need to consider your strategy and budget in tandem. Start by reviewing your current marketing mix and splitting your channels into three broad categories: a) what provides value to your business, b) what you could possibly live without, and c) what you believe you haven’t fully explored yet.
Questions to Ask
After you’ve ballparked your budget, figured out how many resources you’re willing to set aside for emerging technologies, and determine which digital marketing channels are most important to your mix, see if you can answer the following questions.
4. What are your 2018 business goals?
What does your organization hope to accomplish next year? Think about your specific objectives (e.g. 15% more market share, 25% more sales volume, 10,000 more site visits every month) as well as your more nebulous ambitions (greater brand recognition, happier customers), and come up with a list of priorities.
5. What problems do you currently face—and anticipate facing in 2018?
Where do your marketing efforts fall short? What needs to be improved upon? Identify any and all obstacles that prevent you from achieving your goals. Before you determine your budget based on a feeling or a hunch, take a long, honest look at your results over the past year or so. If certain activities haven’t improved over the course of 2017, chances are slim they’ll achieve better results in 2018.
6. What can you do now to future-proof your brand?
In addition to your immediate objectives and obstacles, consider the long-term future as well. Is your industry growing or shrinking, or in the midst of upheaval? What direction is your audience heading in? Envision the market five years from now and try filling in the gaps with your imagination. Anything you can clearly anticipate might be worth your investment now.
Conversely, the same is true for areas of fundamental uncertainty. If you can envision a dozen potential directions for your company, consider the ways in which you can use digital marketing to test different approaches and get a head start.
What to Do Next
Tips 1 through 6 gave you insight into industry trends and your high-level goals and pain points. The following will help you chisel those general shapes into components of your digital marketing budget.
7. Build (or improve on) your customer journey maps and target personas.
Budget planning season is a great opportunity to review your customer journey maps and personas, check your assumptions, and incorporate anything new you’ve learned over the past year (and what you expect to change in 2018).
8. Determine which of your business goals align with specific marketing channels and touchpoints.
Look back to your list of priorities from Tip 4 and, one by one, consider the role digital marketing could play in accomplishing these priorities. For instance, could a Google AdWords campaign generate more site visits while leading to greater brand recognition? Could an app drive sales and customer satisfaction? In general, the more objectives an activity can impact, the more money you should allocate to that activity.
9. Audit your website.
Consider where your customer journey leads. You could develop an extraordinary marketing plan, but it won’t make much of a difference if your audience doesn’t actually engage with your website. Is your site aligned with your targeted personas and business goals? Now is the perfect time to think about updating or launching a new presence—before you start spending money.
10. Put it all together.
Finally, align your business goals to stages in your customer journey and elements of media mix in order to assign resources. If you’d like to dig in even further, you can divide your initiatives into stages that correspond with audience behavior.
A business looking to grow through customer acquisitions next year, for instance, might have awareness-related goals (such as more site visits, new fans on social, more content views) that would make activities such as SEO, social strategy, and landing page/website optimization a priority. At the same time, that company may want to balance acquisitions with loyalty-related goals (such as increased retention rate, and more repeat business) through referral programs, content and email marketing, and online surveys. The business could devote 80% of its digital marketing budget to the former category and the remaining 20% to the latter, thereby making things easy to ballpark: “Let’s spend more on SEO than online surveys next year.”
Don’t call it a day until you’ve taken a second, third, or fifth pass at your budget. Measure, optimize, and adjust as necessary. And when your budget is finalized, you’ll need to create a plan and a KPI dashboard.
…But that’s a story for another blog post. In the meantime, if you have any questions about marketing budgets or would like help creating your 2018 roadmap, we’re here to help. The team at Daylight can work with you to identify what to focus on next year and develop a strategy to get there. Get in touch with us.